Delta Air Lines moves into fuel production in order to cut costs

Delta Air Lines moves into fuel production in order to cut costs

In an attempt to cut fuel costs, Delta Air Line – among the largest airlines in the world – has taken control of the Phillips 66 oil refinery in Trainer, Pennsylvania.

Delta becomes the first airline to move into the sector with the acquisition.

The deal will see the airline revive the shuttered 185,000 barrel-per-day plant.

Analysts say the move will ease fears of a fuel supply shortfall in the north-east of the United States.

The refinery was expected to begin a 50-day maintenance period beginning in early July before resuming production.

Monroe Energy, a Delta subsidiary, will spend about USD$100 million to convert the refinery to increase jet fuel output to 52,000 barrels per day.

Delta hopes the deal will lower its fuel costs, which reached nearly USD$12 billion last year, the largest expenditure on its balance sheet.